The Impact of Fertilizer Subsidy Policies on The Profits and Welfare of Rice Farmers: Lessons from Sumbawa West District

The objectives of this study were to analyze the impact of fertilizer subsidy policies on production, profits, and surplus of rice farmers, and to compare productivity, profits, and surplus of rice farmers. The study was conducted in Brang Rea District, West Sumbawa Regency. The respondents in this study were farmers who owned rice farmers with details of 30 farmers who received fertilizer subsidies and 30 farmers who did not receive fertilizer subsidies. Data were collected through observation, surveys, and in-depth interviews. Data were analyzed using the optimization of the Cobb-Douglas production and profit functions. The results of the study concluded that the impact of fertilizer subsidy policies on production was positive and significant, while the impact on profits was positive but not significant. There was a significant difference between productivity and capital costs or production facility costs between the group of farmers who received fertilizer subsidies and the group of farmers who did not receive fertilizer subsidies, but there was a difference in labor costs and profits but not significant. The level of farmer welfare in the group of farmers who received subsidies was higher than the group of farmers who did not receive subsidies.